What is equivelant to "equity" Profit Participations on the "debt" side?

Answer 1

A debt holder who wants to participate in the equity increases, but does not want to have the risk of a stockholder can do so in the following ways:

1. He can be issued an option or a warrant--i.e. either the right to buy predetermined number of shares at a set price, or the right to "cash in" his warrants at certain trigger events
2. He can carve out what is known as a PIK, i.e. Pay-in-Kind interest or fees. E.g. if you loan a company $100,000, you can negotiate a "cash and current pay" fo say 6% per annum, plus an additional amount based on sales, or some other ratio. E.g. if you negotiated "25% of every 5% increase in gross margin" you would be earning above market return, so long as you realize it is not a current pay or fixed rate.
3. He can enter into a "put" or "call" amount, like an option, where he can "put" his debt for equity or equity like return, or the company can "call" his debt and repay with premium.

Equity warrants or PIK are the most common ways.